4 minute read
GOING, GOING, GONE!
With many new buyers in the property market, including many of our newly arrived southern friends, it is important to understand some of the main ways that properties are sold in Queensland.
Private Treaty - Unfortunately no sweets are involved here. This refers to a private agreement between the buyer and the seller through a normal contract of sale. In Queensland most of the time the Sellers' agent will prepare a contract of sale and the buyer will execute the contract with its offered terms constituting an "offer to buy". The seller will either countersign the contract (at which time the contract is effective) or amend the terms and countersign, where the contract as amended goes back to the buyer for acceptance.
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Tender – No, not like the chicken. This is a process where the seller will ask buyers to submit their best offers for the property and set out other terms which the offer must meet to be an acceptable tender. Usually the seller then has the right to negotiate further with those putting forward the offers or simply accept the highest tender.
Auction - This is a method where a seller sets a date where all potential buyers can attend and place bids on the property based on a pre-prepared contract of sale. The buyers then pit themselves against each other with the highest bidder purchasing the property (provided the property has met the seller’s reserve price - their minimum).
With an extremely strong property market, real estate agents are preferring more and more to proceed to an auction. Pitting willing buyers against each other to attain the best possible price for their seller is the aim. Before you attend, here are a couple of tips of what you can do when looking to purchase a property at auction.
1. Be prepared. This sounds very simplistic but it is amazing how many people do next to nothing before making the biggest financial decision of their life. Before the auction make sure that you have obtained as much detail as possible before the day.
2. Check property prices in the neighbourhood. Today it is possible to do an online search for historical data concerning recent sales in the area and the property itself. The information is freely available and the research is relatively easy to do so arm yourself with every scrap of information you can.
3. Know your price range. Have a pre-planned amount in your head and stick to your limit. Only you know what you can afford so if the price passes that limit, as hard as it may be, let it go and start looking for another property.
4. Auctions are emotional. If you have found a property that suits your every need, your dream place in other words, potential buyers can form an emotional connection. They cannot visualise themselves living anywhere else and often find themselves getting carried away with the emotion and frenzy on the day then bidding far more than they can afford.
5. Get a copy of the auction contract beforehand. The contract should be taken to your accredited Property Law Specialist solicitor for a thorough review. The proper advice can be provided if there are clauses in the contract that may be detrimental to the purchaser. If necessary, consider obtaining searches prior to the auction day.
6. Understand that in most cases, if you are the winning bidder, you will sign an unconditional Contract to purchase the property which will be binding on you. That is a sobering thought if you have bid more than you had budgeted for or if you haven’t done a thorough search before the auction day.
7. Know the full cost. There can be many hidden expenses and charges so make sure you are fully aware of what costs will be yours to pay once the property is sold to you. If you have extended yourself to the limit to purchase the property, those extra outlays may put a severe strain on your finances going forward.
8. Obtain a building inspection and a check for termites. The cost for these are minimal in comparison with the purchase price. A small outlay could save you a fortune if there are severe structural defects or a large termite infestation hidden in the house.
9. Neighbours can be a problem. A few simple checks can reveal if you could end up living next door to a 24 hour party house. Even check if any large construction is planned for the immediate vicinity. Noise and dust can start to grate over a long period of time and you don’t know if the property was placed on the market because the previous owners knew what was coming.
10. Flooding in some areas can be an almost yearly problem. Flood maps and historical records will show where the water will rise to with heavy rainfall and flash flooding.
So regardless of which method is being used to purchase or sell your property please contact the OMB property law team headed by Simon Bennett, accredited Property Law Specialist to assist.
SIMON BENNETT
Partner, Accredited Specialist (Property Law)
Commercial & Residential Conveyancing Structure Advice
General Contract Law including shareholding, partnership & joint venture agreements Commercial & Retail Leasing
Lvl 1/9 Seabank Ln, Southport QLD 4215 P (07) 5555 0000 E info@omb.com.au www.omb.com.au
